Posted by
Dr Pangloss on Thursday, February 22, 2007 2:07:17 AM
First I have to tell you a bit about myself, I have worked for over twenty years in the financial services industry mainly for stock broking firms and asset managers. I think most people in the industry are honest and moral.
However I have come across a news story featuring a 'vulture fund' to be honest this is the first I've heard of them. I did a bit of research and in essence they buy distressed debt from corporations and sovereign nations the debt is sold by the holder to recover a portion of the money because it is on the verge of being written off.
Now the part of this particular business that appalls me is the sovereign debt because they do not get this distressed debt from rich countries, but from the very poor. Countries that are pretty much at the bottom of the UN development table.
The vulture fund will take them to a court in the west and will then sue them for not only the principle of the loan but the interest as well, which bearing in mind the age of these loans is substantial.
I must say that at first sight the sheer rapaciouness of this activity took my breath away. I could not believe that after all the drop the debt campaigning of late with the accompanying approval of our glorious leaders, our courts allow these companies to get rich on the back of these countries - yes they actually rule in their favour!
Now I am in favour of free capital markets but I hope and pray that this is not what we had in mind.
From a most definitely ashamed member of the finance industry.